Proposed MMWD Rate Increase Raises Blood Pressure

It looks like just an extra $3 or $4, but to some bill payers, it's the last straw.

A proposed 4 percent rate increase brought a vocal crowd to the Marin Municipal Water District's board room Wednesday night for a public forum.

MMWD General Manager Paul Helliker said he was encouraged by the turnout, although he found himself the target of some tough questions as customers could face higher rates for the fifth consecutive year.

One man compared the rate hike to "General Motors raising the price of its cars when it's going out of business."

The potential increase would mean a $3.63 increase to the bi-monthly bill for the average single-family home, from $90.72 to $94.35. Customers would see the increase on their bills July 1.

The water district's board members will consider the new proposed rate increase when they meet March 2. They'll have a lot to think about after hearing opinions from all sides on Wednesday.

"I look at my utility bills and … water is the second-cheapest bill I have," said Anne Layzer of Mill Valley. "Since we get our water bills every two months and other bills every month, I think it's like sticker shock. Also, some people probably don't look at their water usage."

The district approved a 9.8 percent rate hike in February 2010. The district has also cut $17.9 million from its total budget, but likely needs to raise rates again to make ends meet.

Revenues have decreased along with water consumption the past couple of years, but expenses continue to rise, including pension costs and water purchases.

The district is, to some degree, a victim of its own success. The district's powerful conservation campaign has met with a 15 percent decline in water usage over the past two years, nearly double its original goal.

That drop in usage can also be partially attributed to the lower number of consumers, both business and residential, according to Oreen Delgado, the district's interim financial manager.

"There may be several factors related to why (usage is down)," Delgado said. "Part of it is the conservation effort and the district's conservation effort, part of it might be based on the economy and also the threat of drought we had several years ago. So all of those factors in combination have affected our demand so that consumption has dropped."

Delgado conceded there's also the possibility that consumers are just using less water in response to higher rates.

The district is trying to make up for a shortfall in projected revenues, but some in attendance Wednesday argued rates hikes aren't the way to make up the gap.

"The board should really look at raising service charge rates, which would be a more dependable source of revenue," suggested Nancy Raetzel of Kentfield.

The district's revenue budget for this fiscal year is $63.3 million, with 71 percent of that coming from water sales and an additional 14 percent from water service charges. The district, which has failed to reach its projected revenues the past two years, had projected $73.66 million in revenues for the 2010-11 financial year.

"The district's revenues have been flat, so the rate increases have not resulted in significant increase in revenue for the district," Helliker said. "In fact, if anything, it's been mainly to maintain a certain level of revenue associated with the expenses that we've had. From a gross perspective, the amount of money that people in our district are paying for the water has not gone up."

At the same time, Helliker explained, the district is bracing for rising costs. The California Public Employees' Retirement System is seeking an additional $971,500 for 2012. Also, the Sonoma County Water Agency, which supplies the MMWD with 25 percent of its water, is raising its rate 6 percent.

The district is organizing a community task force to review rates and offer input to the board.

While the notion of a rate increase hung over the meeting, audience members took the opportunity to raise other topics. Among them were some suspended projects, including a desalinization plant and a pipeline to connect Lake Nicasio and Kent Lake.

The MMWD Watershed Committee will hold a meeting Thursday at 1:30 p.m. regarding a proposal to turn Phoenix Lake into a flood detention basin.